05 November 2020 ~ 0 Comments

Crunch time for babus preparing Budget 2021

The countdown to the annual Budget for 2021-22 has started amid the urgency to push economic growth badly mauled by the Covid-19 pandemic. There is already talk of a third stimulus soon, going by the recent utterances of the Finance Minister Nirmala Sitharaman.  The Budget-making babus led by Finance Secretary Ajay Bhushan Pandey have their work cut out.

Sources say that the first meeting of the budget preparing exercise took place with officials of the Department of Financial Services as well as MSME, housing, steel and power ministries in attendance. The almost one-month long exercise to finalize the Revised Estimate (RE) for 2020-21 and Budget Estimate for 2021-22 will conclude on November 12 after the Expenditure Secretary T.V. Somanathan completes discussions with other secretaries and financial advisors.

This year, however, due to Covid, the number of participants for the pre-budget meetings may be restricted to a maximum of 5 officers for each meeting from a Ministry/Department, not below the rank of Director.

For the Modi sarkar, the next Budget will be crucial since it will have to deal with the impact of the pandemic on revenue collection, disinvestment, expenditure, export and food prices. The indications are gloomy with the IMF forecasting that the economy will shrink by 10.3 per cent. Even the Reserve Bank of India has similarly opined that it will shrink by 9.5 per cent. The Budget will have to address critical issues pertaining to growth contraction and subdued revenue collection due to the pandemic. 

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